Federal Budget and Economy: TaxVox

The House GOP Budget As Can Opener: An Impossible Task and A New Lesson in Dynamic Budget Scoring

Two takeaways from the House Budget Committee’s 2016 fiscal plan : A) It is impossible and B) It is the latest example of the challenges of trying to include macroeconomic effects of tax and spending choices in budget scoring. Let’s start with A. Like most budget resolutions, this one builds only a
March 17, 2015Howard Gleckman
Individual Taxes: TaxVox

Dynamic Scoring Forum: Inside the Black Box

This is one of a series of TaxVox guest blogs discussing dynamic scoring . Whether dynamic scoring for official revenue estimates is a good or bad idea, it is now a part of scoring rules in the House. As a result, it is more compelling than ever to understand the forces that determine economic
March 17, 2015Jane Gravelle
: TaxVox

On Budgeting, Patience, and Rube Goldberg

Out today: A first look at GOP budgets. The US hit its debt limit yesterday (at least technically), and the budget battles have begun. The Senate GOP budget resolution reportedly won’t include detailed plans to overhaul entitlement programs—though the House GOP plan may. The Senate Budget panel
March 17, 2015Renu Zaretsky
Individual Taxes: TaxVox

Can Rube Goldberg Save the Highway Trust Fund?

In principle, the Highway Trust Fund (HTF) is simple. Drivers pay a federal gas tax when they purchase fuel, the revenue goes to the HTF, and the federal government sends the dollars to states and local governments for highway and transit programs. But in practice the system is a mess and a new
March 16, 2015Richard C. Auxier
: TaxVox

Local Tax Threats, Hikes, and Indignities

Chicago Mayor Rahm Emanuel: Without school pension money from the state, property taxes will jump. Facing a tough runoff in his race for reelection, Emanuel is looking for fiscal help from the state, including from its GOP governor. He wants the state to help fund pensions for Chicago’s teachers as
March 16, 2015Renu Zaretsky
: TaxVox

Raising Taxes to Fuel, Fly, and… Drink?

Have taxes, will travel. The American Road & Transportation Builders Association wants Congress to raise the federal gas tax by 15 cents a gallon to generate $401 billion in new transportation funding. Money for the Highway Trust Fund dries up in May. The group suggests the tax be offset with a
March 13, 2015Renu Zaretsky
: TaxVox

Charting a Course for Tax Reform: Might Feel Familiar, Won’t Be Easy

On the Hill: Taxpayer protection sought, tax reform input needed. The Senate Finance Committee holds a hearing today on protecting taxpayers from scams during the current tax filing season. Yesterday, panel Chairman Orrin Hatch and Ranking Member Ron Wyden announced their effort to solicit ideas on
March 12, 2015Renu Zaretsky
Federal Budget and Economy: TaxVox

Dynamic Scoring Forum: Overblown Concerns?

This is one of a series of TaxVox guest blogs discussing dynamic scoring. Macroeconomic scoring, aka dynamic scoring, has been debated for years. For the 114 th Congress, the House has adopted a rule to institute the procedure for major bills. But what would dynamic scoring really mean in practice
March 11, 2015G. William Hoagland
Campaigns, Proposals, and Reforms: TaxVox

Rubio-Lee Hints at Tax Reform's Troubling Direction

Republican Senators Marco Rubio and Mike Lee have introduced what should probably be thought of as the first major set of tax proposals in the 2016 Presidential election. While their proposals are unlikely to be enacted, they hint at the troubling direction that tax reform debates seem to be headed
March 11, 2015William G. Gale
: TaxVox

Credits, Collections and Refunds

The Department of Homeland Security didn’t shut down, but… fallout remains over the President Obama’s executive orders on immigration and their effect on low-income tax breaks. Senate Finance Committee Chair Orrin Hatch wants the Administration to say how many immigrants protected from deportation
March 11, 2015Renu Zaretsky
Federal Budget and Economy: TaxVox

Watch What You Wish For: Dynamic Scoring Creates More Issues for the GOP

As TaxVox readers know by now , House Republicans now require the Joint Committee on Taxation and the Congressional Budget Office to include macroeconomic effects when they produce budget scores of major bills. The GOP hoped this would show that tax cuts would generate so much new economic activity
March 10, 2015Howard Gleckman
: TaxVox

Simplification, Shortfalls and Shifted Assets

Today on the Hill. The Senate Finance Committee examines tax complexity , compliance, and administration with an eye toward simplification in tax reform. Witnesses include Carol Markman of EP Caine & Associates, Mihir Desai of Harvard University, Bruce Bartlett, former deputy assistant
March 10, 2015Renu Zaretsky
: TaxVox

If Wishes Were Taxes, Reformers Would Smile

Everything could come up roses for Rubio and Lee. At least one version of dynamic scoring—accounting for macroeconomic effects of a proposal—has produced some rather glowing estimates of senators Marco Rubio’s and Mike Lee’s tax plan. The Tax Foundation says the Rubio-Lee plan would increase tax
March 9, 2015Renu Zaretsky
Business Taxes: Journal Article

How Much Do Taxes Affect Startup Investment Incentives

In a contribution to the Policy Dialogue on Entrepreneurship blog of Kauffman.org. Joseph Rosenberg and Donald Marron examine how tax policy affects investment incentives for startup companies. Startups often make losses, and thus cannot make immediate use of the R&D tax credit, accelerated
March 9, 2015Donald MarronJoseph Rosenberg
Federal Budget and Economy: TaxVox

Dynamic Scoring Forum: The Dangers of Dynamic Scoring

This is one of a series of TaxVox guest blogs discussing dynamic scoring . One of the strengths of the US budgeting system is that proposals are held accountable through a relatively open process of scoring the costs and benefits. This process, as run by the Congressional Budget Office and others,
March 6, 2015Simon Johnson
: Daily Deduction

Budgets, Taxes, and Addiction

How different will the House and Senate budgets be? There will be no joint budget resolution , despite GOP-control of both chambers. House Budget Committee chair Tom Price and Senate Budget Committee chair Mike Enzi will have separate fiscal blueprints, and their respective committees will mark
March 6, 2015Renu Zaretsky
: TaxVox

Expensive Plans, ACA Developments, and Exercises in Futility

The Rubio-Lee tax reform plan: Interesting, very expensive, and DOA. The GOP senators offer a framework for a huge tax cut that would add trillions to the debt over the next ten years while moving the revenue code towards a consumption tax. TPC did a preliminary analysis of an early version of the
March 5, 2015Renu Zaretsky
Campaigns, Proposals, and Reforms: TaxVox

The Rubio-Lee Tax Reform Plan Raises Important Issues But Would Add Trillions to the Debt

The newest entrants in the tax reform sweepstakes are senators Marco Rubio (R-FL) and Mike Lee (R-UT). Their plan is filled with a number of interesting and credible ideas but ducks many important questions. And, while it is not accompanied by a budget score, the elements that it specifies would
March 4, 2015Howard Gleckman
Individual Taxes: TaxVox

What We Hear When We Talk About Taxes... Musings of a Tax Hound

It’s been just over a year since I started posting TPC’s Daily Deduction. It’s high time I let you in on a little secret: Whenever...
March 4, 2015Renu Zaretsky
State and Local Issues: TaxVox

States Want To Cut Taxes Even More on Pensions. Bad Ideas Never Die.

The siren song of retirement income free of state taxes continues to seduce politicians. No matter that there is little evidence that high taxes on pension income drive away seniors, or that few older people move from one state to another for any reason at all. No matter that tax-free retirement
March 4, 2015Howard Gleckman
: TaxVox

On Tiny Steps, King Edward, and Hidden Assets

Tax reform: Go big or go home, or at least, not very far. TPC’s Len Burman says that senators Marco Rubio’s and Mike Lee’s proposal to eliminate the tax on capital gains would do more harm than good. The senators argue that it’s a step toward a consumption tax. But Len thinks some small steps aren’
March 4, 2015Renu Zaretsky
Individual Taxes: Research report

Composition of Income Reported on Tax Returns in 2012

As income increases, the composition of income changes substantially. For most taxpayers, salaries and wages contribute the most. But higher-earners typically report income from capital gains and businesses.
March 4, 2015Lydia AustinRoberton C. Williams
Individual Taxes: TaxVox

Cutting Capital Gains Taxes is a Dead End, Not a Step on the Road to a Consumption Tax

One of the most useful insights of public economics is the "theory of second best." The idea is that adopting some but not all of the features of optimal policy—the seminal article on the subject called this “piecemeal policy recommendations”—may actually make the economy less efficient. A great
March 3, 2015Leonard E. Burman
: TaxVox

Can Expectations Be Too Low?

Pot tax refunds for all in Colorado? Colorado’s controversial Taxpayer Bill of Rights (TABOR) says that the state cannot keep more tax revenue than it expected to collect in the year it levies a new tax. Colorado is on track to collect an extra $219 million in revenue in the current fiscal year and
March 3, 2015Renu Zaretsky
Federal Budget and Economy: TaxVox

Dynamic Scoring Forum: California’s Dynamic Revenue Estimating Experience

This is one of a series of TaxVox guest blogs discussing dynamic scoring. California was one of the first states in the nation to undertake dynamic revenue estimation of tax proposals. In 1994, governor Pete Wilson (R) signed Senate Bill 1837, which required the Department of Finance to prepare
March 2, 2015Brad Williams